New York Avoids Shutdown

Democratic and Republican New York politicians on Monday vowed that the state government will not be shut and said they would enact another emergency spending bill as they continue to wrangle over a $135 billion budget.

The latest one-week emergency spending bill -- needed to keep state workers on the job after the April 1 budget deadline was missed -- must be approved by midnight.

The uncertainty caused by the lengthy budget battle prompted the state's Dormitory Authority, one of the nation's biggest issuers of municipal bonds, to say it will indefinitely delay a $1.3 billion offering that was planned for late June.

But Senator John Sampson, the Democratic conference majority leader, told Albany reporters: "The extender will pass; the government will continue to operate."

The state must close a $9.2 billion deficit and the legislature's Democrat leaders have rejected about $2 billion of the annual cuts Gov. David Paterson says are needed.

Another $175 million of savings would be wrung from human services, mainly by cutting welfare programs. New York City's Housing Authority will also lose its operating subsidy.

Paterson's cuts were criticized by the Federation of Protestant Welfare Agencies, which said in a statement: "These programs help veterans, hungry clients of soup kitchens and food pantries, children, the elderly, the disabled and other impoverished children and families."

Democratic Speaker Sheldon Silver told reporters the Assembly was intent on restoring $419 million of funds for schools, though it has accepted $800 million of cuts.

Last week, two Democratic senators said they would not vote for another emergency spending bill if the governor included yearly spending cuts -- which he now has done.

Democrats only have a two-seat majority, so this forced the governor to seek Republican help and consider having the state pay its bills with IOUs, as California did last year.

Senate Republican Minority Leader Dean Skelos, who had briefly allied with the two dissident Democratic senators, said Monday his party will block any shutdown.

"As long as the bill that comes before the Senate does not include new taxes, fees or borrowing, we will assure that government will continue to function," he said.